Michael Porter on health care reform
by Merrill Goozner
Harvard Business School professor Michael Porter has stumped the country for five years touting competition as the solution to the nation’s health care woes. “Universal insurance is not enough to address the fundamental challenge facing our health care system,” he told the 4th annual Health Care Congress Sunday afternoon. “The fundamental problem at the end of the day is the value of the health care we deliver.”
And how would he reorganize health care to deliver better value? “Where we need to go is an integrated practice model,” he said. His model entails patient-focused practice groups that bring together all the professionals and delivery systems to treat an individual’s medical condition, not the discreet medical incidents that result from that condition. It’s not that physicians will no longer specialize; it’s that they will no longer practice in specialty silos divorced or only marginally connected to all the other people providing that particular patient’s short- and long-term care.
Competition enters this new system when information technology provides data about the relative performance of these integrated practices. Consumers and payers will be able to use outcomes and price data to not just hold down health care costs, but gravitate to the systems that deliver better outcomes.
It’s a compelling vision. It also tracks very closely with another long-time observer’s perspective on how the health care system has to change, one who has a very different political perspective from Porter. Dr. Arnold Relman, the former editor of the New England Journal of Medicine, has a new book coming out called “A Second Opinion,” where he, too, calls for the total reorganization of the practice of medicine around the integrated practice model in order to deliver patient-focused care to the chronically ill people who account for 75 percent of all health care expenditures.
However, where Porter would have various systems compete by making pricing and outcomes data available, Relman would simply have the state or non-profits employ all the specialists needed to deliver integrated care. He’s also a backer of a single-payer national insurance model where Porter still sees a major role for both insurance companies and for-profit physician practices in the system.
Though Porter admits that computerizing medical records are a tool, not a solution, he suggested at several points in his talk that this tool could resolve the fragmentation that seems, at least to my ears, to be implicit in not attempting to reorganize the actual way that physicians are employed in the U.S. And that view was echoed by the two commentators the Congress lined up to respond to Porter’s talk: Ron Williams, chief executive officer of Aetna Inc., and George C. Halvorson, chief executive officer of the Kaiser Foundation Health Plans and Hospitals, more commonly known as Kaiser Permanente.
“We need care connectivity and electronic databases,” said Halvorson. “Only 8 percent of the diabetics in this country get the right care. We have to move than to 80 percent. To get there, we have to create an architecture that requires people to be in registries.”
Thank goodness John Iglehart, the founder of Health Affairs and currently a national correspondent for the New England Journal of Medicine, asked the next obvious question. It’s a question that could just as easily be posed to Relman as to Porter: “What would force providers to restructure?”
Perhaps the organizers of the conference, which includes the Wall Street Journal, weren’t interested in generating heat to go along with the light shed by Porter. But I would have loved to hear how the president of the American Medical Association, for instance, might have responded to Porter’s (or for that matter, Relman’s) plans for reorganizing the practice of medicine. Moving physicians away from paying for fee for service to paying them for integrated treatment for conditions (the Porter model) or to salaries in integrated practices (the Relman model) represents a revolution in the practice of medicine, one that would entail significant income losses for thousands of doctors.
Yes, it’s happening in many places (Porter). Yes, younger physicians are more open to computerization and working within integrated practice models (Halvorson). Yes, employers are no longer looking to beat up on the insurance companies for failing to hold down costs, but want value for the money they spend on employees’ health care (Williams).
But until someone comes up with a concrete plan for encouraging physicians to move into integrated practices without generating overwhelming opposition, health care reform is going to stay a debate about insurance and not a debate about how to get better quality for the money we spend.





